This section is from the book "Cyclopedia Of Architecture, Carpentry, And Building", by James C. et al. Also available from Amazon: Cyclopedia Of Architecture, Carpentry And Building.
In order to have a good contract, the parties must be legally competent. As an infant is favored by the law, a person on coming of age may affirm or repudiate contracts made while under the disability of infancy, although the other party to such a con-tract is bound. It is furthermore unsafe to enter into a contract with a lunatic or a drunken person. A married woman was formerly unable to contract; in some states married women may now make valid contracts about their own property, while in many states the disability is entirely removed.
It may also be mentioned here that where a private corporation is a party to a contract, a question may arise whether the making of a contract is within the powers of the corporation. To determine what these powers are, reference must be had to the charter or articles of incorporation, and perhaps to the statute law of the state which created the corporation. If a corporation was formed for the purpose of building and operating a railroad, there would be no doubt of its power to build a station. If on the other hand a corporation formed to carry on a drug business should propose to build a grain elevator, legal questions would arise.
In dealing with public or municipal corporations also, questions of the extent of powers may be raised. Questions of this sort are extremely varied, and may be either very simple or very difficult of solution. Where a corporation makes a contract beyond its powers, the contract may, so long as it remains unperformed on both sides, be rescinded by either. Yet if a person has entered into a contract with a corporation which is in fact beyond its powers, but has had no reason to suppose the contract outside such powers, and has in part performed the contract, his rights are generally protected by the law. This does not, however, make such a situation anything but a very undesirable one, and care should therefore be used to obtain reasonable assurance that a contract is within the powers of a contracting corporation. Common knowledge of the standing and nature of the corporation may give such assurance; on the other hand, the matter may be so close to the line that nothing but an opinion of competent counsel would be sufficient.
Assuming that the parties concerned are capable of contracting, there are two elements essential to the validity of the ordinary contract which will be considered here; one is mutual consent, and the other, consideration.